How much do I really need.

I have a small 10 X 12 room with hardwood floors and not heavy drapery or anything to speak of. I am going to buy a HDTV and want to add a Home Theater to it. The system recommended by the Home Theater shop was Sony KP51HW40 TV, Sony STRDB1070 Receiver, Sony DVPNS700 DVD and Definitive Technology Procinema 80 speakers. While I have researched and read comments here and elsewhere, I am just wondering is it over kill for such a small room for someone who isn't a DVD junkie or would I be wiser to get something less expensive. Also I would appreciate any comments on the above components.

The thing is, you don't need a ton of power for that room, and you can save money by going with a less expensive receiver with fewer features and less power.

Also, while a very nice set of speakers and probably worth the money (I don't know for sure...never heard/seen/priced them)you can likely get 90% of the performance and satisfaction with another suite for less money. Look at the JBL NSP1 for a comparison, plus a sub that you will need to source out.

I can vouch for the JBL NSP1 speakers. Pair them with a half way decent sub and they sound great. I set my father up with them in his tv room powered by a mid line Yamaha.

They really sound great. They are definatley a few notches down from my system, but at the cost - my god! My wife wanted to kill me after knowing what I spent on my complete system and seeing what I set my father up with for 1/4th the cost.

Hi Mark. Welcome to HTF!
That ProCinema speaker system is considered a "micro" type system. Good for small rooms/dorms. (You wanna see big speakers, ask the shop to show you the BP3000TL's from DefTech )
I'm not familar with the Sony receivers, but to drive those speakers, you only need a modest receiver and these are usually in the $500 price range.
Hope this helps.

The system they quoted me was about $2,600 for the TV and about $1,900 for the rest. I only will use it for when I watch DVDs which probably won't be more than once a week or so. No special needs other than to take advantage of HDTV with component inputs etc.

The ProCinema 80's should run you about $850-900. The MSRP is $1000, but most dealers will give you a discount on that. Not sure if the receiver and DVD player should then cost $1000 additional. You can get darned good receivers in the $600 range (I got my Denon 2802 for $615 including shipping from 6th Ave)

Those prices look fair and make sense for a modest system.
My only suggestion would be to ask if they offer a Dennon/Yamaha receiver for that price instead. Sony has a .. un-even reputation when it comes to receivers.
You should also budget:
$40 for a copy of the AVIA DVD
$40 for the Radio Shack SPL Meter (to level adjust)
It sounds like you are going to have fun.